GBP/USD rose 0.53% to 1.3600 as a US Treasury announcement drove dollar declines, overshadowing UK inflation data.
GBP/USD climbed 0.53% to close above 1.3600 on Wednesday, marking its highest level since May. The gain followed a midday Treasury notice in New York that weakened the dollar, while UK inflation data had minimal impact on sterling’s movement.
UK July CPI inflation rose to 2.9% from 2.6%, matching consensus, while core inflation held at 2.6%, slightly above forecasts. Services inflation, closely watched by the Bank of England, slowed to 3.4% from 3.6%. The increase was driven by a 13.5% rise in regulated household energy prices, not demand-side pressures.
The BoE had already priced in the inflation rise, with projections showing a peak near 3.2% in Q4. The committee’s July 6-3 hold suggests no immediate shift in policy ahead of the September 17 meeting.